Startup Companies to Watch in 2021
When the pandemic hit in mid-2020, there was a lot of concern among investors that working with startups would slow down. However, now that we are in the beginning part of 2021, we can see that these fears were a bit of an overreaction. Investment firms reacted quickly, putting technologies in place in order to help individuals do much better at working remotely. Truly, the resilience of the entrepreneur continues to persist, even in these trying times, so investments in many of these startups are ripe for the picking. Are you ready to do it? Well, the first thing you have to determine what type of investor you are. These are two types.
Venture Capitalists and Angel Investors
A venture capitalist is usually an individual who has a very high net-worth and desires to be involved in the business from the beginning. They will generally provide financial backing for a startup that has high-growth potential in exchange for a stake in the equity of that new business. On the other hand, an angel investor is an individual who also has a high net-worth, but he or she will usually only invest between $25,000 and $100,000, where a venture capitalist could go as high as millions of dollars if need be.
How do you go about becoming an angel investor?
Since becoming a venture capitalist is beyond the reach of most people, you are probably interested in how to become an angel investor. Well, according to Money Morning the best way to find startup companies to invest in would be to pick out your niche. Simply put, it is in your best interest to pick out an industry or market that you are passionate about and are interested in. Being intrigued by the work that the startups you invest in do is just the start. Of course, if you are having difficulty determining your niche, then you should think long and hard about your background and experience. Finally, you should be aware that being an angel investor is a risky proposition simply because it has been estimated that 90% of startups will fail. Thus, most experts recommend spreading out your investments at $25,000 apiece in at least ten startups. Even if nine of those fail, one good one will often more than make up for the other nine that didn’t work.
How do I select the right startups to invest in?
This can seem like a befuddling proposition, but one way to find startup companies to invest in is to do your homework as thoroughly as possible. You should conduct your research, looking at some questions as the size of the market, the target customers, and whether the startup is making any money and getting new customers. You also should fully consider the team as well in order to complete your analysis.
What are some of the best current startups to invest in?
Finally, many of you are wondering what some of the best current startups are to invest in. Well, as of 2021, here are some good examples:
Interestingly enough, Coursera didn’t really begin as a business. It was more of a platform created by professors Andrew Ng and Daphne Koller that wanted to simply turn online videos from the top universities into online videos. Perhaps not surprisingly, interest began to get intense, and Koller and Ng realized they were on to something. They raised capital, started a company, and they are now devoted to having an online platform where students can earn a degree at a fraction of the cost.
If you are interested in investing in startups, perhaps one of the trendiest areas to do it would now be in the payments industry. This is where Stripe comes in, and they hold one advantage in that they have made it incredibly easy for companies to make payments within their websites and apps.
Of course, there are many other startups that you can invest in. The key adage here is that “you get out what you put in.” Always do your research, sharpen your expertise, and follow your niche, and you are sure to find a solid diamond in the rough!